Singapore-based Flextronics has selected the Port of Tanjung Pelepas (PTP) in Johor as the new site for its RM1 billion expansion programme.

The capital outlay over a 10-year period will see the company consolidate no less than six plants now operating from leased premises in Malacca and Johor at the Tanjung Pelepas Free Zone (TPFZ).

The new site, which will be built and leased to Flextronics by the PTP, will be the company’s biggest in South-East Asia, with some 12,000 employees when it starts operations in April next year.

Spread over some 16ha and offering some 1.2 million sq ft of manufacturing space, the stand-alone building will also be the biggest in TPFZ.

PTP chief executive officer Datuk Mohd Sidik Shaik Osman and Flextronics Asia president Peter Tan signed the agreement for the project at PTP yesterday.

Flextronics, a leading global electronics manufacturing services provider, recorded a turnover of US$16 billion (US$1 = RM3.80) last year, of which Malaysia accounted for 16 per cent, or US$6.9 billion (US$1 = RM3.80), of the its global revenue.

The deal with Flextronics is another feather in the cap for the PTP which is positioning itself as the leading manufacturing, supplies and procurement centre for multinational corporations in the region.

Since 2000 the PTP has also been opening up new sites within the TPFZ to promote entrepot trade and manufacturing industries involved in producing goods for export.

So far, seven warehouses and one factory have begun operations with more than RM100 million invested.
The players include German carmaker BMW, which has set up its Asian spare parts distribution centre in the PTP, Schenker Logistics from Germany, Maersk Logistics from Denmark, Geodis from France, Linfox Logistics from Australia and Naigai Nitto from Japan.

The deal with Flextronics is expected to see its suppliers located onsite to reduce material procurement costs, transportation time and enhance delivery time to customers.

“We plan to double our existing investment of RM525 million in Malaysia over the next 10 years with our consolidation of operations in the PTP,” said Tan.

The new site, he added, would be a fully integrated state-of-the art manufacturing centre spread over 1.2 million sq ft of floor space.

Tan said it would be cost-effective for the company to also relocate some of its existing Singapore operations to the PTP although this would be dependent on customer requirements.

Mohd Sidik said Flextronics’ move will spur more investors to follow suit and take advantage of the unique opportunities offered by the TPFZ.